Abstract

﻿We conduct a survey to examine the impact of individual risk preferences on better car replacement decision in the insurance market. The survey consists of a lottery choice task and an insurance questionnaire. Our results strongly support contentions that consumers are significantly influenced by their risk attitudes and the insurance premium. Further, we find that female consumers are more influenced by their degree of risk aversion than male consumers when making such insurance decision. Moreover, our results show that when the level of risk aversion is controlled, the individual risk preferences have different magnitudes of impact on insurance decision making.

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